VernonFoster

Management&Rentals

Property
Management for the
Investor Information & Tips for
Current OwnersInformation for
Visiting Landlords

"Property
Management is all we
do... Nothing else!... Well, almost..."

Questions? Answers!

» Considering using Professional Management?Answer»Have a manager, but not happy?Answer»What is a Real Estate IRA? Is it right for me?Answer»How do I add Rental Property to my portfolio?Answer»I have a rental portfolio, but am looking for more Property. Can VFMR help me?Answer»I can't sell my home for a reasonable price. I am relocating. Can I rent to cover my mortgage?Answer»How can I cut my operating expenses to increase my rental property return?Answer»Can I pass Schedule C losses against my 1040 Gross income?AnswerThe
following column contains periodic postings by Vernon Foster as well as
anchor links to the above topics. Feel free to scroll and read a few
items. If you would like to contribute your suggestions and ideas, do contact Vernon.

Revised 11/2017

Update Info: Topics various

Lenoir
County Tax Values.You
should have received NOTICE from Lenoir County regarding the
revaluation. In the vast majority, assessed values were reduced
anywhere from 5 to 25 percent of prior valuation. You likely observed
the reduction in value was on the "improvement" and not the land.
Commercial valuations were not as lucky. As a rule, if the assessed
value is no more than 10% above (perceived) market value, it's not
worth arguing. Remember, income producing property is valued based upon
Income/Expense, not comparables. The Senoir Appraiser for Lenoir County
is Markum Wheatley. He too is an investor/landlord just like you.
Therefore, it does make good sense he can be reasonable in considering
any challenge of tax valuation which is presented in the proper manner.
The time period to mount a challenge is ending. I did randomly look at
several Owner's values and did not see any that were worth the argument.
IMPORTANT:
If you have a listed Property which has suffered loss, the value may
NOT reflect the diminished value. An example of diminished value would
be significant fire or flood damage which has not been repaire AND will
not be repaired or otherwise contemplated.
The new valuations DO affect this current tax year, but is not
retroactive to 2016 or earlier.
Information as to how to mount a challenge of value was sent to you
from Lenoir County Tax Office late March.Update->
Call (252) 527- 7174 (Lenoir County Tax
offices) to confirm January 2018 is the final Appeal Period for the
current property tax revaluation.For Assistance from
Vernon -> Call or Text at(252)
468-0660his VoIP number. List subject as "Property taxes".Rental
Investor Forecast-Kinston/Lenoir County.You
own Rental Income Producing Property in Kinston/Lenoir County... You
are exactly where you need to be with all or a portion of your
investments.
LENOIR COUNTY... in particular Kinston within the ETJ,
remains a "Rental Town". Families and Individuals have to have SHELTER
(If you don't, you are homeless!) You have heard me speak of Maslow's
Hierarchy (click the hyper-link for explanation). Along with FOOD and FUEL,
everyone
has to have SHELTER.
If
you are interested in expanding your rental base or you are
contemplating adding rentals as an income vehicle, we need to talk! EMAIL me and include subject as
"Rental Investment".For Assistance from
Vernon -> Call or Text at(252)
468-0660his VoIP number. List subject as "Market forecast".

Bad Weather & Accidents. How's your Hazard
Insurance doing?

Quick
Reminders:1.VFMRdoes NOT
require you carry Hazard Insurance on your Investment Property. But, it
would be playing "Russian Roulette" to not have (at the very least)
NCJUA coverage. We ONLY require you carry Liability Coverage (by your
personal homeowner's policy or Business Liability Coverage).

2. You cannot
bind hazard insurance in less than 30-days. So, if Lenoir County is
threatened with a significant storm and your coverage is lapsed or
non-existant and the threat is less than 30-days away, you are out of
luck. You can only hope Kinston/Lenoir County does not get hit with a
Fran, Floyd or Irene level storm. BUT, an Atlantic Hurricane for this
area is like termites... Not a question of if,
only a question of when...
not the least of which, and more likely, plumbing damage or fire.

3. Liability
Insurance... This is required.
If you have changed insurance carriers or any other sort of change,
send this information to VFMR.

4. "Why did I not receive funds this
month?" The
answer to that question and many more are contained within your
Month-Ending Statement. Before you raise concern, please be sure you
have reviewed your Statement as well as any attached Owner Note or Paid
Invoice... But, if you still have a question after having reviewed your
emailed Statement, do feel free to call or email your question.

5.
CENTRAL AIR CONDITIONING. R-22 is being rationed and the cost/pound is
rising EVERYDAY. If your Property has the older R-22 freon, start
putting back sufficient funds for the inevitable. As of 2019, NO
R-22 refrigerant will be available.

IF
you saw this coming, wouldn't it have been a great "score" to have
bought 600 pounds of the stuff... You would be looking at a return of
astronomical proportions!

6. DIRECT DEBIT for Rental Receivables.
We are not there just yet... software support by Key Property
Management Systems (service provide for VFMR)
has co-authored with Wells-Fargo this tool, BUT it is neither free nor
inexpense. So, VFMR
continues to encourage your Tenant(s) to avail themselves of their
depository bank's Ofer this service, and so fanline Billpay services. All of the commercial banks
ofr, it is free to customer checking.For Assistance from
Vernon -> Call or Text at(252)
468-0660his VoIP number. List subject as "General Question".

VFMRis
ready for you. Here's what
the Property Manager considers:1. VFMRmanages 'Rent-Ready'
Properties. If
your Property is needing significant repairs or renovations, please
knowVFMRmanages tenable
Properties only. If your Property is
occupied/rented, it likely meets or exceeds minimum requirements
established by regulatory folks such as the local PHA, State and/or
Federal regs. If it's minor "touch-ups", we can handle it or, at the
very least, advise you. Let's do it!2. "My Tenant
is
a problem. I'm tired
of the excuses!" Okay...
In 31-years as a professional Manager, I've been
presented with more than a few problem tenancies. You might think you
have to "clean up the mess" before you can hireVFMR. In most cases, that is not
necessary asVFMR is a seasoned Risk
Management
Agency. If the Tenant is the problem, you
are exactly where you need to
be. Waiting for the problem to be solved BEFORE bringingVFMRon-board is contrary to
whatVFMRcan and will do for you +
You will likely waste/lose more of your money. Let's do
it!

3. "I have a broker
managing my Property, but I am not happy... He's more interested in
anything but my Property! What can I do?" That's easy... Fire him...
Hire VFMR."There
is aLOT that goes
into ethical, legal and professional Property Management. First of all,
someone who manages real property for another (in North Carolina) must
hold a valid Real Estate Broker's License. But, there's more to it than
just the licensure. I could fill page after page of all the intricacies
and details. BUT, you want your rental cash flow and without a bunch of
problems or other concerns. CountVFMRin on that! We want
EXACTLY what
you want. Let's do it!

4. "VFMRalready manages a lot of
Property
for many Investors. Are you sure you have the resources, energy and
time for my Property?" Heck yes!VFMRis kinda like the Marine
Corps
recruiting matra: VFMR is always "looking for a few good
(Investor/Owners)". Let's do it!

5. "Okay. Nice words and
pitch, Vernon. Can you deliver?" That's simple.
If you want both
accountability and reliability in a Property Manager, you are exactly
where you need to be. There
is no other place, person or entity in this
service area that can truly say it and mean it. Let's do it!For Assistance from
Vernon -> Call or Text at(252)
468-0660his VoIP number. List subject as "Management
Inquiry".

Dateline
- October 2017 revised.Owner's
Trading Post...Ready
to acquire
more?Looking
to trade? Time to par down a fixed asset?.

There has been
discussions and planning for this Investor Tool. As with any initial
"build" (some call these types of things Testing
in Beta,
you input and
suggestions will be appreciated!So how do you decide?
What makes a Property desirable to the Investor?
(YOU!)
1. Use
Your Formula. There are more than a few ways to determine
viability of a rental asset. Cash-On-Cash; Gross Rent Multiplier;
Capitalization... General Rule of Thumb - Requirement = positive
cash flow. As of the 1986 Tax Reform Act, a Landlord/Real Estate
Investor cannot use losses from a passive
income generator
(Rental Property) to reduce Adjusted Gross Income. Hey, I'm not a tax
professional! Ask your tax accountant/CPA if this is correct... Bet
he/she says "Yes".2. Are you under
50-years old? [You ask yourself, "Why does Vernon ask
that?"] If you own traditional IRAs, you are making practically
nothing on that money! Consider establishing a self-directed Real
Estate IRA. A few Investors represented by VFMR have done just that...
Remember, everyone needs a roof over their head; otherwise, they are
homeless! Using the right acquisition formula, and professional
management to keep you freed-up from the nuts and bolts so as to make
more $$ elsewhere, converting a portion of your retirement portfolio
into a Self-Directed Real Estate IRA can make a big and positive
difference. Check it out.3. Owner's Trading Post...
Yes, I do have several Investors who are
interested in entertaining a sale of certain real estate assets. Let's
cut to the chase... Here is a current listing of FOR SALE Listings
directed at Investors (Please remember, I don't do traditional
List/Sale for Owner-Occupant market... I deal with folks that either
make money or want to make money.)Kinston City Council
offers Lease to the Texas Rangers (MLB) farm
league program to commence with the 2017 Baseball season. The deal is
pending approval by the Carolina League who governs the "who and where"
of professional baseball in the Carolinas.Lenoir Community College
announces expansion of its robotics program
(aimed at providing educational base for manufacturing jobs using
computer programming skills, i.e. - Robotics).Rumors of Business
announcements exist... We are told there will
(hopefully) be an annoucement of a new manufacturing placement in
Lenoir County... We are also told the Dupont Sonora Plant is nearing
completion of a major facility expansion which should add a few more
jobs to the local economy.Kinston/Lenoir County
needs meaningful jobs to bring in both capital
and resurgence of value to the local service area. One or both of the
latter means greater value for the Investment Property Owner's holdings
as well as a renewed opportunity to command higher rents. As changes
occur, you can look for your Property Manager to react accordingly for
your interests.For Assistance from
Vernon -> Call or Text at(252)
468-0660his VoIP number. List subject as "Acquisitions".

Disclaimer:
I am not a CPA nor do I have degrees in accountancy. Since the Federal
Tax Code is more than a few volumes thick, you should already be using
a good and aggressive Certified Public Accountant to plan ways to
safely save your hard-earned money by avoiding needless taxes.

Dateline - July 24, 2015Single-Property
Accounts with an Owner Reserve.

There
have been several instances where there was an imminent need for funds,
e. g. - Tenant failed to pay the rental which required Superior Court
Filing Fee and Sheriff's Service Fee. In those instances where there
was no escrow, your Agent had previously been able to advance that
Owner Account by a transaction called "Due Agent"
(Agent took its own funds and deposited those into the Trust Account
covering the expense... which was repaid by the Tenant curing
Breach/Paying the fee, collected from the "former" Tenant's Security
Deposit or repaid upon direct request to the Owner). That practice has
been abolished by the Real Estate Commission as a form of co-mingling
(the mixing of personal/company funds with Trust funds). As much as we
consider that type of transaction to be kosher, it just cannot be
conducted.An
email was sent in June (2015) to
all Owners of single-property accounts stating $200.00 would be held in
escrow (an Owner Reserve) so as to meet any immediate/eminent issue
which required funds. Now, one might simply say, "Hey, if you need some
funds for
this-or-that, just send me an email or give me a call." Sounds
simple, right? Wrong.
:( The need is always "right
now". It is impossible to hold up the entire calendar while an
Owner sends the necessary funds.The
Owner Reserve is just
that... Owner funds held for emergency/gotta-do-it-now situations.
UPDATE 11/2017. Agreement for all Owner Accounts include the Owner
Reserve provision [was effective 01/2016].For Assistance from
Vernon -> Call or Text at(252)
468-0660his VoIP number. List subject as "Reserve/Escrow".

Generally speaking,
escrow for calamity or other shortfall is unncessary with Owner
Accounts containing multiple occupied leaseholds (as there is
normally an available cash flow if an
urgent need arose).

Dateline - July 24, 2015.Market
Conditions for Kinston/Lenoir County Service area.

There appears to be some
movement to
positive announcements of recent. You may have seen this news...Kinston City Council
offers Lease to the Texas Rangers (MLB) farm
league program to commence with the 2017 Baseball season. The deal is
pending approval by the Carolina League who governs the "who and where"
of professional baseball in the Carolinas.Lenoir Community College
announces expansion of its robotics program
(aimed at providing educational base for manufacturing jobs using
computer programming skills, i.e. - Robotics).Rumors of Business
announcements exist... We are told there will
(hopefully) be an annoucement of a new manufacturing placement in
Lenoir County... We are also told the Dupont Sonora Plant is nearing
completion of a major facility expansion which should add a few more
jobs to the local economy.Kinston/Lenoir County
needs meaningful jobs to bring in both capital
and resurgence of value to the local service area. One or both of the
latter means greater value for the Investment Property Owner's holdings
as well as a renewed opportunity to command higher rents. As changes
occur, you can look for your Property Manager to react
accordingly for
your interests.For Assistance from
Vernon -> Call or Text at(252)
468-0660his VoIP number. List subject as "Market Conditions".

Dateline -
July 24, 2015.

"What
can I do or What should I NOT do?."

There
is alway a good answer to an investment strategy. We are all
familiar with "Buy Low. Sell High" plan...
It's a good one, albeit a
rather simplistic approach that applies mainly to liquid assets (cash,
common stocks, etc). But, it does not adapt well when it comes to real
estate investments. Here's a quick take on several scenarios:1. Property is held "in
fee" (don't owe a bank). Stay put! You are in
the "catbird's seat". If you cash out in this market climate, you will
most certainly be on the losing end of an investor sale... But for
argument's sake, you decide "What the heck, I'll just take the loss".
If you take the likely net proceeds and invest it in a non-real estate
vehicle, what kind of return would you likely get? 4% 7%? Maybe
9%? The odds are extremely good, your return would be
significantly LESS than providing a rental housing. Hey, remember...
Kinston's leaseholds are 66% rental! Kinston is a rental leasehold
community. THAT is very good for you.2. Cash Flow is positive
(green). Same thoughts apply, even if you owe
a bank a monthly payment. If the investment is "working", best to
remain in the game.3. Someone writes you a
letter "I'm buying houses/rentals, call
me". You can send me the letter and I'll respond for you... Your
Property is an actively managed leasehold. But, if this interests you,
reasonable value (to you) is very likely not available from this type
of solicitation. I do know of a few folks who are taking the "shotgun"
approach in Kinston and Lenoir County... What I mean by "shotgun"
approach is: If you put out enough hooks with worms, a fish will likely
bite. The "hooks and worms" are cheap to this type of speculator as the
only thing it takes is a little time searching tax records for absentee
ownership, a First Class postage stamp, copier (reasonable quality so
the letter looks personal) and someone to answer the phone. I
will say it, but in a different way... The ONLY reason to sell a
Property held "in fee" or otherwise showing a profit should be
characterized by the word "catastrophic" (the Owner/Seller has to have
money at any cost... which will always result in a very poor return).4. The Tenant says "Can I
buy my house?" Your answer would be
either "yes" or "no". What do they say? Anything is for sale if the
price is right. We have this issue covered in our agreement... The
Property is not for sale, but if the Tenant approaches my office with
this question, I will certainly let you know. If the Tenant were to
contact you directly (which should not happen, but...) do not discuss
any potential terms or other particulars. I am your Property Manager
and I am a licensed Broker... The Laws and Rules governing real estate
contracts do not preclude a private Owner selling his or her
leasehold(s) without Broker representation. But, there are State
Statutes which do govern real estate transactions which can be unknown
or misunderstood by non-licensees. Regardless of the situation, I
represent your interests and anything outside of the normal monthly
management... You should not hesitate one-minute. Call me.5. Property is not
producing a positive cash flow. Okay... On face,
this is not good. There is not a simple answer. Yes, a "green" cash
flow is the goal. Your CPA may be telling you, "Hey, your Schedule C
Property/Properties are doing well!"! Sometimes, the negative cash flow
works... But, a good Certified Public Accountant is the best judge for
the performance of your estate (Tax Laws are in constant flux, so even
if you think your investment portfolio is too small to justify a CPA's
fee, think again). The question begs, "What do we do to get from 'red'
to 'green'"? Generally speaking, vacancy loss and/or expenses would be
where to look. If you are looking at an average that would be a
deficit, you and I need to talk. I've been working with investors since
1984... Do the math. That's over 30-years. If I have not acquired a
reasonable amount of knowledge beneficial to your decisions, I've been
on another planet....These are a few topics
I wanted to share... if you have some other
items or ideas you think would be good to discuss and impart, let me
know... I will try to get some good information your way each quarter.For Assistance from
Vernon -> Call or Text at(252)
468-0660his VoIP number. List subject as "Planning & Strategy".

What do you see in your
mailbox near the end of August? Answer: Lenoir
County Tax Invoice. Someone once said, "If you ain't spent it, you made
it." So, let's talk about saving a few dollars which means increasing
your bottom-line.If you are local to
eastern NC, Monday evening, June 1... If you were
watching 9 On Your Side, you may have seen Angie Foster and myself
addressing the Lenoir County Board of Commissioners. The Reporter did
not catch my words when I directly addressed Mike Jarman, the County
Manager... Mike had given a verbal report to the Commissioners the
previous week that Property Tax revenue was "flat". As I have observed
declining values since mid-2008, the market values continued a downward
spiral for the following 5-years. Historically, Property Tax values
(that is before 2008) have usually been below market value. What
happened pursuant to the mortgage melt-down and recession was a hard
and deep reversal of that old axiom.So, what did Vernon say
to the County Manager and Commissioners? "Property
Tax
values are down. If we do the math, it has the potential to be a
significant loss to the City and County."
I can get more detailed, but anyone (that's YOU!) has the right to
present a challenge to the Valuation placed by the County. How? Value
is determined by one of two methods: Comparable sales -or- Income
Approach. But, the basis for the challenge must be from sales 2 to 3
years PRIOR to the current (2015) year. The valuation of your Property
was established BEFORE 2008 (unless you have already lodged a challenge
years prior). 2015 is the revaluation year. In 2012, values had been
"tanking" since mid-2008. If you assume a loss of vlaue by, say 25%,
this will add up. For example, your rental leasehold has a Tax Value of
$100,000 prior to 2008, and it LOST value by the 25%, that's $25,000
that you reasonably not pay be assessed taxes. Tax rate is
$1.49/hundred value for City+County. That comes to $372.50 net tax.
That's $372.50 you can use against other operating expenses. Otherwise,
that's $372.50 just tossed to the 4-winds! Again, if you don't spend
it, you've made it! Right?The latter is an example
of what you could do to improve your
bottom-line... In some cases, that savings could be more... or it could
be less.Now, if you are
interested in a possible reduction in your rental
property tax expense, you can do it by the INCOME APPROACH or (if they
can be found), good and proper comparable sales of similar investment
property. I'm willing to bet that over 80% of the rentals managed by my
office would qualify for some degree of reduction in tax basis. My
thought... Anything over 10% is worth the effort.Let me know if you have
questions, I'll be glad to answer them.HAZARD &
LIABILITY INSURANCES. Our Agreement does not require you
to own any hazard insurance (against fire, wind, rain, etc). It does
require you to own General Liability Insurance (against Clicker,
Clacker & Cloak suing you because the Tenant's friend tripped
over
a tree root in the yard of the rental property). Both are important
because you want to protect your investment as well as your own
personal estate. Regarding the latter, Lawyers go "after the deepest
pocket". Ask yourself: "If that tree root ended up in a Judgment for
$500,000 against my estate...". I don't have to finish that thought. It
would be horrible. This does not happen often (Thank
Goodness!).
But, it's kind of
like termites in the Southeastern US: It is not a question of "if",
but it is a matter of "when". Hint: That's why it is a very good idea
to have a Termite Bond on your rental structures. When it becomes
visible, a lot a damage has already been inflicted. Sorry... got
side-tracked by termites!Back to insurance... Most
Owners have got their insurance Agents "trained"
:)... Each renewal period, they have their Insurance Agents fax or
email to my office a CERTIFICATE OF INSURANCE or written verification
of liability coverage through the Owner's Primary residence homeowner's
policy. Either one is acceptible. Neither is not... So, just call your
Insurance Agent and verify your Liablility Coverage and extend that
coverage to VERNON
FOSTER MANAGEMENT
& RENTALS, L.L.C. Your Insurance Agent
gets its commission
with your renewal... Let them do a bit of leg-work for you with this
item.

* Resources. V F M R is not just Vernon Foster.
Vernon's a pretty big deal, but add to
the equation: Full-time/Knowledgeable Staff; Hand picked and seasoned
repair vendors (at prices the individual cannot command); "Insider"
contacts and influence; Dynamic exposure for your investment property;
A committment to constant and positive improvements in the management
of your Property; over 60-years of combined Property Management
experience and knowledge; accessibility (You have a question or need?
We are available to you.); Risk Management approach and more...

* Time.
What is your time
worth? What does it cost you to self-manage or be affiliated with a
"mixed agenda" service (remember, V F M R does not sell insurance,
provide
investment counceling (except when it comes to your property), build
houses or run a typical List/Sell brokerage. Also, consider your
"emotional equity" which can and does come into play dealing with
Tenant issues. V F M R will free up your time for
other productive
endeavors.

Consider This. For
the
period of September 2013 to March 2014, VFMR has procured (leased) over$30,000 in monthly
gross rents for
its Owners. This equates to "bankable" investment value of over $363,000 (Annual
Gross
Rent Role). The
numbers speak
volumes... this is just a two-quarter "run", folks. Vernon
Foster and VFMR want you to work with you. Email
or Call Vernon. He's glad to answer
your questions
and excited for the opportunity.

NEED TO
KNOW. It
is important for you to know, Property Management is a full-time
endeavour. This is the reason for the above statement. Collecting and
accounting to you for the rents due you is just a single-facet of the
mission. There are more:Availability
of the Manager and its Staff to both
Owner and TenantTenant's
confidence in the Manager and its Staff,constant
and proactive revision of management
methods and toolsMaintaining,
nurturing and adding positive
relationships with any and all who affect the mission - City of
Kinston Customer Services, offices of Clerk of Court and specifice
Judges, the Sheriff and Police Departments and its key contacts, Repair
Vendors as true assets,North Carolina Real Estate Commission Legal
Staff, the Tenants themselves, and more Property
Manager's personal observations for each
and every rental PropertyProperty
Manager's personal contact with the TenantsAnticipating
needs and potential risk of the
physical leaseholds as well as laws, rules and regulations affecting
riskStreamlining
of the information flow between all of
the aboveUnderstanding
of the Manager that the success of the
mission goes WELL beyond any idea of "9-5".For Assistance from
Vernon -> Call or Text at(252)
468-0660his VoIP number. List subject as "Management
Inquiry".

Successful
management offices "stay the course". If broker/manager is looking at
profit
centers unrelated
to your needs, I consider this to be a conflict
of
interest. Add
to this...
the broker/manager who has its own rental property mixed in with you
rental property... Now, that really is a conflict. Your needs and those
of your tenancies could take a back seat
to a particular Broker's goals. The dedicated management office is to
care for its Owners and their Tenants. Those interests must be first
-and- last. Property Management is a service-oriented profession. So,
Vernon Foster Management & Rentals, LLC "VFMR" is dedicated to "just you".
IF there will be any brokerage activity, it will be directly related to
the needs and goals of investment property, i.e. - 1031 exchange,
acquisition of new rental property by an Owner, divesting of existing
rental property, Contract forPurchase in a management relationship.One
otherway to assess my reasoning, a
typical Sales Agent office that
"side-lines" some rentals would "water down" the ability to
effectively
manage... worse yet, not very experienced with the risk-management
required of a seasoned Property Manager.
When you call, we know why. We do not have line-extentions
saying "Press 1 for sales, 2 for insurance, 3 for 'Tom, Dick or Harry'." You do
get "VFMR... Vernon Foster Management
& Rentals".For Assistance from
Vernon -> Call or Text at(252)
468-0660his VoIP number. List subject as "Question for VF".

Each Owner's approach to their
rental leaseholds varies. Some folks
check "every 'i' and cross every 't'", while others take more of a
"cash" approach to the investment. As your Property Manager, I will
assume the latter. Too little information is a problem... Too much
information is never a problem. Strategic planning is important. Older
structures do require more attention and planning for future
needs. Protecting the viability of the structure as an income producing
tool does allude to that dreaded word "expenses". It is inevitable that
paint peels and components wear. I will be periodically communincating
with each Owner as to scheduling and planning. This will reduce costs
in the long-run. Asset Management is not in the managers written job
description, but "Vernon Foster" is telling you now. it just got added!Key
Strategy... "Keep it Green". Who wants to show a loss (in any business
endeavor). Remember, as a Real Estate Investor (Landlord, if you will),
IRS automatically considers your Profits (or losses) to be the result
of "passive participation". It is my understanding, passive losses
cannot be passed to/against 1040 income [all this stuff has to do with
Sole Proprietorship (Ownership is not a LLC or corporation). The adage
"If it ain't green, it ain's worth it" has great merit. If you are
trying to figure out how to save paying taxes, that's a GOOD THING. If
you get a tax refund... OMG!!! If you are paying taxes, you are making
$$$. THAT'S a GOOD PROBLEM. Back to the question about "pass-though"...
I am not a tax authority, but someone told me if you have some level of
discretionary decision-making such as authorization of an expense
greater than $149.99, you can consider yourself as Active Participant
which would allow you to pass-through losses from Schedule C to your
1040 Gross Income (to reduce your overall tax burden). BUT AGAIN... No
one wants to use losses as a business model. This should be either
non-existent or exceptionally rare. How's it go? Be happy and pay Uncle
Sugar his due. :-)For Assistance from
Vernon -> Call or Text at(252)
468-0660his VoIP number. List subject as "Planning".

A lot
of contractors and associated repair services "love" to "hookup"
with a management company, for obvious reasons. There are specific
requirements of ANY such vendor dispatched to rental property, some of
which are: Contractor's Business Liability Insurance coverages, promise
of reduced or very competitive pricing, observation and initiative as
an additional layer
of risk management ("eyes
& ears"), "go when I say go", Contractor's
warranty of the finished job,
and more. As the vast majoirty of our Owners utilitze this service, do
know there is an agreed limit on VFMR's
discretionary actions. As always, repair instructions from you, the
Owner, is "fluid". At any time, you are certainly free to conduct these
types of repairs independent of VFMR
within the bounds of the Lease, HUD
HQS and/or governing law.You
pay this management company not
one extra penny for this service. It is
both prudent and reasonable to allow coverage for "normal and
necessary" incidents. If ever you have a question regarding any repair
or
its cost, I want to hear from you.For Assistance from
Vernon -> Call or Text at(252)
468-0660his VoIP number. List subject as "Repairs OR Cash Flow".

Okay, by my own volition, VFMR
is the best! But,
being "top dog" requires
continuous learning and committment to the mission. Add to that, your
comments, observations, suggestions are needed to gauge the current
efforts as well as make good modifications..... Tenants are utilized
in the same fashion. So, periodically let me know. Also, I will
be sending you emails with ideas for your feed-back.For Assistance from
Vernon -> Call or Text at(252)
468-0660his VoIP number. List subject as "Feedback for You".

You
either love it or hate it! If you are reatively new to this reporting
method or just occasionally dig in a bit deeper, it is an Accountant's
style of reporting. Yep, takes a bit of getting acquainted, but it will
provide the Owner great tools for analysis of your rental property
performance.
Two recent issues/questions have come up:
1. Why are there two "CASH FLOW" lines, but the figures are different?
2. Why is MY deposited funds not the same as the (first
line) CASH FLOW?
It is a question of semantics. The use of the descriptive tilte CASH
FLOW in the two locations IS confusing.
The first CASH FLOW line represents not the actual flow of funds
between VFMR
and the Equity-Holder (real live person or entity), but PERFORMANCE.
This is ONLY stating the current month and year to date PERFORMANCE of
the Account. At this point (location on the Statement) we are NOT
talking about "cash".
The second CASH FLOW represents the actual/physical flow of "cash"
(funds, if you will) between VFMR
and the Equity-Holder (You... or the Entity you own). THIS CASH FLOW is
the amount paid from one Party to the other with the net monthly amount
being the actual cash/funds sent into the Equity-Holder's depository
bank account.
I have requested VFMR's
software provider make two line Title changes to clear up what is a bit
vague. This change should be effective with the November 2017 Monthly
"ACCOUNT" Statement.For Assistance from
Vernon -> Call or Text at(252)
468-0660his VoIP number. List subject as "Monthly Statement".

If you are
considering VFMR for Property Management,
I am really excited to be able to provide this serivce. The servicing
bank (Select Bank, Goldsboro, NC) has been really proactive in
supporting the ACH.
The availability of funds (for the owner) are now PDQ... no
"snail
mail" delay as well as faster access to deposited funds. Most of the
larger banks will be "second banking day", but you can check with your
bank for
their specific policy as to "funds availability". Your Statement
will also have attached any invoices for repairs. Those invoices will
be the scanned image. I suggest you make a folder on your computer and
name it "MONTHLY STATEMENTS". If something ever happens to your
computer files, not to worry as I will have the identical file archived
on my end.For Assistance from
Vernon -> Call or Text at(252)
468-0660his VoIP number. List subject as "Bank Deposits".